Aust share market expected to open higher

Australian markets are expected to open higher after Wall Street experienced a good rally on Friday. Credit: AAP

The Australian share market is set for a positive start to the week on the back of a strong US economy.

AMP Capital's chief economist Shane Oliver suspects local markets will open about 25 points higher after Wall Street experienced a good rally on Friday.

The Dow Jones Industrial Average rose 300 points, or 1.1 per cent while the S&P 500 also rose 1 per cent and European shares rose 0.7 per cent.

"The reason the markets rallied was twofold, you had some good jobs figures out of the US with employment up more than expected and that provided a bit of confidence about the US economy," Dr Oliver told AAP on Sunday.

"So the overall picture is the US economy remains pretty strong and at the same time wages growth was at 3 per cent ... so you've for this ongoing combination in the US of solid jobs growth and low-ish wages growth which means interest rates in the US can remain low but the US economy is still growing."

Also buoying the market was constructive progress in the US and China trade talks, with the countries indicating they had reached "consensus on principles".

Locally, the week ahead will see the Reserve Bank meet on Tuesday where it is expected they will leave interest rates on hold.

"We think that they should be cutting rates again because the economy is still very week, we still have a lot of either unemployed or underemployed people in the workforce and inflation remains very low as does wages growth," Dr Oliver said.

"I think they probably will cut rates again but it looks like it's not going to come until December."

The week ahead will also see the Reserve Bank issue its statement of monetary policy for the quarter - which will provide an idea of how the bank sees the economy and guidance as to what it might do in the future.

Retail sales figures are due out on Monday and are expected to show a modest rise while trade figures due for release on Thursday are expected to show some slippage in the size of the trade surplus after iron ore prices fell.